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In acquiring and investing in for-profit colleges, private equity firms haveturned to their regular playbook of buying companies and layering on debt,but in this case, it is the largely the federal government that provides the debtand students, especially low-income students of color, who end up with thatdebt, often without having received an education that prepares them for a job.While the for-profit college industry has faltered in recent years, private equity
has continued to make investments, notably Apollo Global Management’s ac-quisition of University of Phoenix owner Apollo Education in early 2017.As the Trump administration rolls back the greater regulatory scrutiny the
for-profit college industry has faced during the last several years, it is privateequity that stands to benefit the most, posing continuing dangers to students, taxpayers, and the integrity of the federal financial aid system.
PRIVATE EQUITY’S FAILING GRADEPrivate equity investment in for-profit collegesFor more than a decade, private equity firms have helped drive growth inthe for-profit college industry in the United States, acquiring and helpingto grow chains including the Art Institutes, Argosy University, Walden University, the University of Phoenix, and Ashford University.
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PRIVATE EQUITY FIRMS THAT HAVE INVESTED IN FOR PROFITCOLLEGES INCLUDE: Apollo Global Management (ApolloEducation/ University of Phoenix)
KKR (Laureate Education/ WaldenUniversity, EDMC/ Art Institutes andArgosy University)
Goldman Sachs and Providence Equity (EDMC/ Art Institutes and Argosy University)
Warburg Pincus (Bridgepointe Education/ Ashford University)
Willis Stein & Partners, LandmarkPartners and Vision Capital (Education Corp of America/Bright-wood College and Virginia College)
JLL Partners (Education Affiliates/All-Star Career College and FortisCollege)
TA Associates (Full Sail Universityand Vatterott Educational Centers)
Quad Partners (Blue Cliff College)
A more comprehensive list is at theend of this report.
For-profit colleges owned by private equity firms drew more than $5 billionin US Department of Education Title IV funds in the academic year ended20152, and hundreds of millions of dollars more in Post 9/11 GI Bill and USDepartment of Defense Tuition Assistance funds.Some PE-owned for profit college chains have been particularly aggressive
in utilizing US Department of Education Title IV funds. To take just one example: Southern Careers Institute, a Texas-based chain
of vocational schools, is owned by private equity firm Endeavour Capital3. During the academic year ended June 2015 (SCI fiscal year ended December2014), Southern Careers Institute violated the US Department of Education’s90/10 Rule4 by deriving more than 98% of its revenue, $32.4 million out of$33.0 million, from federal government (Title IV) sources, the highest of anyfor profit college.5
10 years after they had started school, former students of Southern CareersInstitute’s Austin campus earned just $20,500 on average6, almost $5,000less than the average Austin resident with just a high school diploma.7 Just18.9% of Southern Careers Institute-Austin students had paid back any of theirfederal student loans three years after leaving school, compared to the nationalaverage of 46.4%.8
Department of Education funds provide a massive subsidy to PE-owned colleges
Private Equity Stakeholder ProjectPRIVATE EQUITY’S FAILING GRADE
Some PE-owned for profit college chains have been particularly aggressive in utilizing US Department of Education Title IV funds.
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Private equity-owned for profit colleges, like other for profit colleges, areheavily dependent on US Department of Education Title IV funds includingfederal student loans and grants such as the Pell Grant. On average, Department of Education Title IV funds accounted for around 80% of revenue at private equity-owned for profit colleges.1
Share of SCI Revenue from Federal Sources(Title IV) (Fiscal Year)
1
0.95
0.9
0.85
0.8
0.75
2010 2011 2012 2013 2014
84.31%
88.20%87.60%87.45%
98.32%
2
EDUCATION MANAGEMENT CORP. (GOLDMAN SACHS/ PROVIDENCE EQUITY/LEEDS EQUITY AND LATER KKR)In November 2015, Education Management Corp (EDMC) entered into a
settlement with the US Department of Justice and agreed to pay $95.5 millionto settle claims of illegal recruiting, consumer fraud, and other violations.9
EDMC was owned by the private equity arm of Goldman Sachs, ProvidenceEquity Partners, and Leeds Equity Partners until August 201410, when thecompany’s lenders, led by private equity manager KKR, converted their loansto a 90 percent equity stake in the for-profit college chain.11 The allegationsby Department of Justice extended through the periods when Goldman Sachs/Providence/Leeds were major equity owners in EDMC and KKR was a majorlender.12
The Justice Department alleged that EDMC ran a high-pressure boiler roomwhere admissions personnel were paid based on the number of students theyenrolled.13
“Operating essentially as a recruitment mill, EDMC’s actions were not onlya violation of federal law but also a violation of the trust placed in them by theirstudents - including veterans and working parents - all at taxpayer expense,”said Attorney General Loretta Lynch.
ASHFORD UNIVERSITY/ BRIDGEPOINT EDUCATION (WARBURG PINCUS)In May 2014 Ashford University, a subsidiary of Bridgepoint Education,
agreed to pay $7.25 million to settle claims that recruiters lied to convinceprospective students to enroll in online classes. While Bridgepoint was publiclytraded, private equity firm Warburg Pincus owned a majority (61.4%) of thecompany as of April 2014.14
Iowa Attorney General Tom Miller alleged Ashford and Bridgepoint violatedIowa’s Consumer Fraud Act by withholding critical information, using high-pressure sales tactics, charging huge non-refundable fees and makingmisleading statements to convince prospective students to enroll in onlineclasses.15
Deceptive practices
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“Operating essentially as a
recruitment mill, EDMC’s
actions were not only a
violation of federal law but
also a violation of the trust
placed in them by their
students - including veterans
and working parents - all at
taxpayer expense.”Attorney General Loretta LynchNovember 16, 2015
Multiple for-profit colleges owned by private equity firms have reachedsettlements with state and federal agencies following allegations that theyengaged in deceptive practices. A few noteworthy examples include:
3
Photo: Avi (CC BY 2.0)
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“Our investigation found what we allege was troubling conduct by Ashfordrecruiters, including misleading prospective students to encourage them tosign on the dotted line,” Miller said. “Unfortunately for many Ashford students,they didn’t get the degree they hoped for or the job they were led to believethey’d get after graduating. What they did end up with was a crushing amountof student loan debt.”16
Two years later, in September 2016, the Consumer Financial Protection Bureau (CFPB) ordered Bridgepoint to pay more than $24 million to refundand discharge debt that students accumulated through an in-house loan program that used deceptive marketing to lure borrowers. CFPB officials saythe company misrepresented the total cost of the loans by telling prospectiveborrowers that they could pay them off by sending as little as $25 a month.But the typical payments on the loans were far higher. “Bridgepoint deceivedits students into taking out loans that cost more than advertised, and so weare ordering full relief of all loans made by the school,” said CFPB DirectorRichard Cordray.17
EDUCATION AFFILIATES (JLL PARTNERS)In June 2015, Education Affiliates agreed to pay $13 million to the United
States government to resolve allegations that it violated the False Claims Actby submitting false claims to the US Department of Education for federal student aid for students enrolled in its programs.18
The government alleged that employees at EA’s All-State Career campus inBaltimore altered admissions test results to admit unqualified students, createdfalse or fraudulent high school diplomas and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to“diploma mills” to obtain invalid online high school diplomas. These allegationsalso led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell.19
“The various cases that were settled here include numerous allegations ofpredatory conduct that victimized students and bilked taxpayers,” said UnderSecretary Ted Mitchell of the U.S. Department of Education.20
POOR STUDENT OUTCOMES Like the for-profit college industry more generally, many private equity-owned
for profit colleges have failed to provide an adequate education for studentsdespite drawing federal funds and encouraging students to take out tens ofthousands of dollars in loans. For example, a 2016 report from the National
“Unfortunately for many
Ashford students, they didn’t
get the degree they hoped for
or the job they were led to
believe they’d get after
graduating. What they did
end up with was a crushing
amount of student loan debt.”Iowa Attorney General Tom Miller, May 16, 2014
“The various cases that were
settled here include numerous
allegations of predatory conduct
that victimized students and
bilked taxpayers,”Ted Mitchell, Under Secretary ofthe U.S. Department of Education,June 24, 2015.
4
Former Maryland Lt. Governor Anthony Brownspeaking at Fortis College ribbon cutting. (CC BY 2.0)
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UNIVERSITY OF PHOENIX (APOLLO GLOBAL MANAGEMENT)In early 2017 Apollo Education, the owner of the University of Phoenix for
profit college chain, was taken private by Apollo Global Management a (thenunrelated) large private equity manager. While University of Phoenix enroll-ment has fallen sharply from its 2010 peak, the chain still enrolled 171,000students this year, the Associated Press reported.23
Based on federal data, graduation rates at University of Phoenix campusesare dismally low – from 17% at the University of Phoenix campus in San Jose,California24 to 8.4% in Boston25 to 7.4% in Arlington, Virginia.26 These compare to national average graduation rate of 41.9% for all colleges and universities.27
Several University of Phoenix programs, including its teacher assistant/aideassociates degree, behavioral sciences associates and bachelor’s degree, andhealth information/medical records technology associates degree programs,failed the US Department of Education’s Gainful Employment standards in2015, the most recent year available – standards that measure whether graduates earn enough money to pay down their federal student loans.28
Students graduating from the University of Phoenix with teacher’s aide/ assistant associates degree earned an average of $18,094, significantly belowthe average earnings of someone with just a high-school diploma ($25,000).This was also the case for University of Phoenix students graduating with apharmacy tech/ assistant associates degree ($20,422), another program thatfailed federal Gainful Employment standards.29
Bureau of Economic Research that shows that for-profit students experiencea “decline in earnings after attendance, relative to their own earnings in yearsprior to attendance.” Some specific examples include:A recent study published in the Journal of Human Resources, “Gainfully
Employed? Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data,” noted that students at for profit chainsdo particularly poorly:
“Here we observe worse performance among the chain for-profits:
annual earnings declines are nearly double in magnitude for chains
(about -$2,400 vs. -$1,200). Employment outcomes are negative for
chains (-2.5 percentage points), but show a positive differential for
independent institutions (2.0 percentage points).”21
The study went on to note that “for-profit attendance does not pass a bene-fit-cost test and leaves the average student with a loss of about $1,200 overher lifetime [compared to not attending college at all].22
Graduation Rates, University of PhoenixCampuses vs. National Average
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
University University University Nationalof Phoenix, of Phoenix, of Phoenix, Average
Boston Arlington San Jose For AllColleges
andUniversities
8.40% 7.40%
17%
41.90%
5
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According to the US Department of Education’s College Scorecard website,the average University of Phoenix student ended up with $32,813 in federalstudent debt. This does not include private student loans.30
The University of Phoenix has drawn the most complaints to the VA of anycollege from students receiving Post 9/11 GI Bill funds.31 Of these, most students complained about financial issues (e.g., tuition/fee charges – 323complaints), followed by quality of education (179 complaints).32
Education Corporation of America (Landmark Partners, Vision Capital)For profit college chain Education Corporation of America (ECA) is owned
by private equity firms Willis Stein & Partners, Landmark Partners and VisionCapital.33 In 2015 Education Corporation of America significantly expandedby acquiring from Kaplan Education, a division of Graham Holdings Co., 38Kaplan College campuses and incorporating them into its Virginia College andBrightwood College chains.34 ECA schools enroll almost 60,000 students.35
In 2015, the majority (19 of 35) of Virginia College’s programs failed federalgainful employment standards.36 According to Department of Education data,a student at Virginia College’s Greensboro, North Carolina campus, for exam-ple, earned an average of $24,400 ten years after starting classes there, lessthan the average income of a Greensboro resident with just a high schooldiploma.37 Just 36% of students who attend Virginia College’s Greensborocampus earned, on average, more than those with only a high schooldiploma.38
Five of Brightwood College’s programs failed federal gainful employmentstandards. Another 27 programs were rated “zone” or warning zone, meaningtheir graduates’ annual loan payments were 20 to 30 percent of discretionaryincome or 8 to 12 percent of total earnings.39 A student at Brightwood College’sNashville, Tennessee campus earned an average of $24,600 ten years afterstarting classes there, less than a Nashville resident with just a high schooldiploma.40 Just 38% of students who attend Brightwood College’s Nashvillecampus earned, on average, more than those with only a high schooldiploma.41
Education Affiliates (JLL Partners)In addition to settling charges with the US Department of Justice that it
violated the False Claims Act, eighteen programs at Education Affiliates’ FortisInstitute brand failed the Department of Education’s Gainful Employment standards as of 2015.42
According the US Department of Education’s College Scorecard tool, a student who attends Fortis’ Indianapolis campus makes just $22,200 ten yearsafter entering school. Just 30% of students who attended the school earned,on average, more than those with only a high school diploma.43
Income, Brightwood College-Nashville student vs. Nashville resident with a
high school diploma
25300
25200
25100
25000
24900
24800
24700
24600
24500
24400
24300Brightwood College Nashville ResidentNashville Student with just a high
school diploma
$24,600
$25,175
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WHO IS TARGETED BY FOR PROFIT COLLEGES?The impact of the for-profit college sector, including for-profit colleges owned
by private equity firms, is not distributed equally. Students from low-incomebackgrounds and students of color, particularly African-American and Latinostudents, make up a disproportionate share of for-profit college students.44
A 2014 paper by the Leadership Conference on Civil and Human Rightsshowed that African-American and Latino students are over-represented in for-profit colleges, making up 41 percent of the student body.45 This over-representation was even more extreme at the for-profit giant Corinthian Colleges: an analysis of Corinthian’s 2014 enrollment numbers shows that people of color comprised the majority (62 percent) of its students, womencomprised 71 percent of its students, and African-American women comprised26 percent.46
A 2014 study by the Center for Responsible Lending showed that over one-quarter (28%) of African-Americans enrolled in a four-year institution attend afor-profit college, compared with just 10% of whites. A 2016 Brookings Institution study reported that for-profit students have the lowest average annual household income, at just $28,530, significantly lower than public two-year (e.g. community college) students ($41,718) and other public andnon-profit colleges and universities.47
For-profit colleges also have a higher proportion of female students than public and non-profit colleges and universities.48
In addition, for-profit students are almost twice as likely to have served inthe military.49
For-profit colleges also disproportionately enroll low-income students, olderstudents, and single parents.
STUDENT DEBT/ DEFAULTSIn October, the National Center for Education Statistics (NCES) reported that
students who attended for-profit colleges were more than twice as likely to default on their loans than students who attended public educational institutions. According to the NCES report, 52% of the students who attendedfor-profit schools defaulted on their loan within ten years.50
Delta Career Education (Apollo Investment Corp)Apollo Investment Corp, the business development company (BDC) man-
aged by Apollo Global Management, the owner of the University of Phoenix,has equity and debt investments in for-profit college firm Delta Career Educa-tion51, which operates the Miller-Motte College, Miami-Jacobs Career College,McCann School of Business and Technology, and Berks Technical Institutechains.52
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Photo: U.S. Air Force photo/Airman Jerilyn Quintanilla
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According to Department of Education data, the average student at Miller-Motte College’s Augusta, Georgia campus graduated with $25,515 in federalstudent debt. Ten years after starting classes, the average Miller-Motte Augustastudent earned just $23,000 a year. Just 20% of Miller-Motte Augusta students had paid down any of their federal student debt three years after leaving school, compared to a national average of 46% for all colleges and universities.53
Instead, nearly a fifth (19.4%) of the 2014 cohort of Miller-Motte Augustastudents had defaulted on their debt within three years of leaving school.54
The national 2014 cohort default rate is 11.5% for all colleges and universitiesand 15.5% for all for-profit schools.55
FINANCIAL RESPONSIBILITYThe US Department of Education requires colleges and universities to submit
audited financial statements to demonstrate they are maintaining the standardsof financial responsibility necessary to participate in the Title IV programs.56
Several private equity-owned for profit colleges failed the Department of Education’s financial responsibility test during the 2014-2015 academic year.Schools that scored in the “not financially responsible” range include TridentUniversity International (owned by PE firm Summit Partners), NorthcentralUniversity (Falcon Investment Partners), Tribeca Flashpoint College (SterlingPartners), Blue Cliff College (Quad Partners), Instituto de Banca y Comercio(ABRY Partners), Vatterott Educational Centers (TA Associates), Fortis College(JLL Partners), Virginia College (Landmark Partners), Miller Motte College(Apollo Investment Corp), and the Art Institutes (KKR).These and a number of other private equity-owned for profit collegesincluding Swedish Institute (Quad Partners), National University College(ABRY Partners), All-State Career (JLL Partners), Brightwood College (Landmark Partners), Miami-Jacobs Career College (Apollo Investment Corp),Walden University (KKR) and Argosy University (KKR) have been placed on“heightened cash monitoring” status by the Department of Education57, requiring them to operate under more restrictive conditions and extra scrutinybecause of concerns about their management or administration of federal fi-nancial-aid dollars.58
PE-OWNED COLLEGES AND ACICSIn late 2016, the Obama Department of Education stripped the Accrediting
Council for Independent Colleges and Schools (ACICS) ofDepartment recog-niition, due to concerns about the agency’s oversight of for-profits, includingCorinthian Colleges and ITT Technical Institute, that had been charged withdeceptive practices. “ACICS’s track record does not inspire confidence that itcan address all of the problems effectively,” wrote Emma Vadehra, chief ofstaff to the education secretary. The ACICS was the largest accreditor of for-profit schools.59
Federal Student Loan Default Rates, 2014 Cohort
0.21
0.19
0.17
0.15
0.13
0.11
0.09
0.07
0.05Miller-Motte Miami- All All
College Jacobs For-Profits CollegesCollege School and
Universities
19.40%
17.50%
15.50%
11.50%
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A number of private equity-owned colleges were accredited by the ACICSincluding some of the Art Institutes (KKR), Delta Career Education (Apollo Investment Corp), Virginia College and Brightwood College (Landmark Part-ners, Willis Stein & Co, Vision Capital), Florida Technical College and Institutode Banca y Comercio (ABRY Partners), Stautzenberger College and Rockford Career College (Wafra Partners), American Institute (Primus Capital), TribecaFlashpoint College and Spartan College of Aeronautics and Technology (Sterling Partners).60
These schools are currently operating under a provisional accreditation andhave 18 months to find a new accreditor.61
TRUMP ADMINISTRATION COULD BE A BOON FOR PE-OWNED FOR-PROFIT COLLEGES
Since taking office, Trump-appointed Secretary of Education Betsy DeVos,herself the former chair of and current investor in a private equity firm62, hasmoved swiftly to roll back oversight of and regulations governing for-profit colleges as a number of for-profit college industry figures, including RobertEitel and Julian Schmoke, have joined the Department of Education.63
For example, DeVos has moved failed to implement and moved to gut theObama-era Gainful Employment Rule, which requires for-profit schools andprograms to help students prepare for "gainful employment in a recognizedoccupation" to receive federal funding.64 More than one third (35%) of the 804college programs that failed the Department of Education’s Gainful Employ-ment Rule, were at for-profit colleges owned by private equity.65 DeVos also ismoving to erase the Obama Borrower Defense Rule, which established procedures for students harmed by their schools to have their federal loanscancelled. Thus far, 98.6% of all Borrower Defense claims have been filed byfor-profit college students.66
The Department of Education under DeVos has also ceased coordinationwith the Consumer Financial Protection Bureau67, a partnership which had resulted in multiple settlements with for-profit colleges and hundreds of millionsof dollars in loan forgiveness, including a $24 million settlement at private equity owned Bridgepointe Education.68 DeVos also may give a sympatheticresponse to accreditor ACICS, which is now seeking reinstatement.
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US Secretary of Education Betsy DeVos withDonald Trump
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NAME SCHOOLS/OTHER NAMES ENROLLMENT EMPLOYEES OWNER/INVESTOR ACQUIRED
Laureate Walden University 1,070,900 67,800 KKR (Reduced stake to 6.52% Jul-07Education globally including n 2017), Bregal Investments,
70,100 online (US) Caisse de depot,Sterling Partners
Apollo Education University of Phoenix, 139,200 28,000 Apollo Global Management, Dec-16College for Financial Planning, (Univ of Phoenix) Vistria Group,The Iron Yard (closing), Najafi CompaniesWestern International University(closing), international schools
Education EDMC, Art Institutes, 65,000 15,000 KKR Aug-14Management Corp Argosy University (Exited Oct 2017)
Education Brightwood Career Institute, 60,000 1,001 Landmark Partners, Aug-12Corporation Brightwood College, Virginia Monroe Capital, of America College, New England Vision Capital
College of Business, Golf Academy of America, Ecotech Institute
Bridgepoint Ashford University, 43,384 6,615 Warburg Pincus Jan-03Education University of the Rockies (Exited Nov 2017)
EduK Group National University College (NUC), 27,000 3,000 ABRY Partners Jun-10Instituto de Banca y Comercio (IBC), Ponce Paramedical College (POPAC), Florida Technical College (FTC), Digital Animation and Visual Effects School(DAVE), LaSalle Computer Learning Center
American Higher @Home Prep, Media Institute, Wafra Partners Aug-04Education East West College of Natural Development Medicine, Stautzenberger College,
Rockford Career College
American American Institute Primus Capital Funds Jan-08Institutes Holdings
Arizona College Arizona College of Allied Health, Arizona Sentinel Peak Capital Dec-10College of Pharmacy Technology
Education Affiliates Fortis, St. Paul's School of Nursing, 1,001 JLL Partners Nov-04Driveco CDL learning center, GDA Training,Denver School of Nursing
Full Sail University 15,000 4,281 TA Associates Management Aug-11
The Rocky Mountain RMCAD 339 TA Associates Jan-11College of Art and Design Management
The Los Angeles 2,334 455 TA Associates Jan-11Film School Management
Vatterott Vatterott Sullivan 777 TA Associates Nov-09Educational Centers Education Centers Management
AmeriTech College Main Street Capital Mar-12
Blue Cliff College BCC Quad Partners Apr-08
Pacific College of Quad Partners Dec-08Oriental Medicine
Swedish Institute Swedish Institute for 100 Quad Partners Jan-08Physiotherapy
Trillium College Trillium 237 Quad Partners ?
Dorsey Schools 150 Gemini Investors, Quad Partners Feb-06
Star Career SCA, Star Technical Gemini Investors, Summer Jul-10Academy Institute School Group Street Capital Partners
StrataTech StrataTech, Beam 201 Graycliff Partners, Summer Oct-08Education Group Reach Education Street Capital Partners
List of private equity-owned for profit colleges
Private Equity Stakeholder ProjectPRIVATE EQUITY’S FAILING GRADE
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NAME SCHOOLS/OTHER NAMES ENROLLMENT EMPLOYEES OWNER/INVESTOR ACQUIRED
Midwest Technical MTI, Delta Summer Street Oct-12Institute Technical College Capital Partners
Career Learning Graylight Partners June-15
Graylight Partners Career Quest, Sverica Capital Dec-09Quest Education Management
Career Step 125 Norwest Mezzanine Partners, Feb-15Revelstoke Capital Partners
Career Training Academy CTA HCP & Company Dec-11
Michigan Institute of MIAT HCP & Company Aug-14Aviation and Technology
Concorde Career Colleges 980 Liberty Partners Sept-06
YTI Career Institute Liberty Partners Oct-05
Henley-Putnam Henley Putnam 15 CMS Small-Cap Private Jul-06University Equity Fund, Liberty Partners
Detroit Institute of DIME Beringea, Mar-14Music Education Invest Michigan
Digital University Digital OnCourse Learning, Nov-12The Riverside Company
Health and Safety HIS, American Safety 107 Maranon Capital, Millpond Equity May-15Institute & Health Institute Partners, The Riverside Company
EDIC College Renovus Capital Partners Mar-12
Education Consolidation Robertson College Beverly Capital, Maxim Partners Jan-10
Westervelt College Capstone Partners, Education Feb-12Consolidation, Maxim Partners, Robertson College
Florida Coastal FCSL 100 Sterling Partners Jan-04School of Law
Spartan College of Redstone College 1,001 Sterling Partners Mar-16Aeronautics and Technology
Meteor Learning 501 Sterling Partners, Spring Sep-13Lake Equity Partners
The Infilaw System Infilaw Ares Capital, Sterling Partners Jan-04
Tribeca Flashpoint Tribeca Flashpoint 173 Ernest Pomerantz, Jun-12College Media Arts Academy Sterling Partners
Heavy Equipment USA Heavy Equipment, Heavy Evolution Capital Partners Jun-15Equipment Colleges of America
International Education 501 Berggruen Holdings May-07
IQ Company ICPR Junior College Advent-Morro Equity Partners
Javelin Learning Systems JTC Education Holdings, 2 Arcady Bay Partners, Mar-09Javelin Technical Training Excellere Partners
NCU Holdings Northcentral University Falcon Investment Advisors, Jan-09GroundSwell Capital, RockBridge Growth
Penn Foster 50,000 Falcon Investment Advisors, Dec-09Vistria Group
Sotheby’s Institute of Art Cambridge Information Group Jan-02
Southern Careers Institute SCI 1,500 80 Endeavour Capital Oct-09
Southern Technical Southern Tech, STI 160 Alcentra Capital, Wicks Oct-12Institute Group of Companies
Trident University TUI, Touro University 6,197 Summit Partners Jul-07International International
Triumph Higher Escoffier School of Camden Partners Jan-14Education Group Culinary Arts
Unitek Information Unitek 162 Cressey & Company Jun-13Systems
Vista College 15 Prospect Partners Jun-05
West Michigan The Windquest GroupAviation Academy
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1 Proprietary School Revenue Percentages Report for Financial Statements with Fiscal Year Ending Dates Between 07/01/14 –06/30/15, US Dept of Education.2 Proprietary School Revenue Percentages Report for Financial Statements with Fiscal Year Ending Dates Between 07/01/14 –06/30/15, US Dept of Education.3 endeavourcapital.com/team/dietz-fry/, endeavourcapital.com/team/chad-heath/, endeavourcapital.com/ec/tall-oak-learning/, accessed Oct 21, 2017.4 “New Analysis Finds Many For-Profits Skirt Federal Funding Limits,” US Dept of Education, Dec 21, 2016.5 Proprietary School Revenue Percentages Report for Financial Statements with Fiscal Year Ending Dates Between 07/01/14 –06/30/15, US Dept of Education.6 VA GI Bill Comparison Tool profile for Southern Careers Institute-Austin, accessed Oct 22, 2017.7 Based on estimated earnings of $25,437 in for a high school graduate in Austin, Texas, US Census Bureau American Community Survey 2015.8 VA GI Bill Comparison Tool profile for Southern Careers Institute-Austin, accessed Oct 22, 2017.9 “For-Profit College Company to Pay $95.5 Million to Settle Claims of Illegal Recruiting, Consumer Fraud and Other Violations,” US Department of Justice, Nov 16, 2015.10 EDMC Form DEF-14A, Oct 7, 2013.11 “EDMC announces debt restructuring; expects improved capital structure,” Pittsburgh Post-Gazette, Aug 27, 2014.12 “For-Profit College Company to Pay $95.5 Million to Settle Claims of Illegal Recruiting, Consumer Fraud and Other Violations,” US Department of Justice, Nov 16, 2015.13 “For-Profit College Company to Pay $95.5 Million to Settle Claims of Illegal Recruiting, Consumer Fraud and Other Violations,” US Department of Justice, Nov 16, 2015.14 Bridgepointe Education 2014 Form DEF-14A, Apr 18, 2014.15 “$7.25 million settlement reached to settle fraud claims against Ashford University,” WQAD News 8, May 16, 2014.16 “$7.25 million settlement reached to settle fraud claims against Ashford University,” WQAD News 8, May 16, 2014.17 “For-profit Bridgepoint Education forced to forgive $24 million in private student loans,” Washington Post, Sept 12, 2016.18 “For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student Aid,” US Dept. of Justice, Jun 24, 2015.19 “For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student Aid,” US Dept. of Justice, Jun 24, 2015.20 “For-Profit Education Company to Pay $13 Million to Resolve Several Cases Alleging Submission of False Claims for Federal Student Aid,” US Dept. of Justice, Jun 24, 2015.21 “Gainfully Employed? Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data,” Journal of Human Resources, Spring 2018.22 “Gainfully Employed? Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data,” Journal of Human Resources, Spring 2018.23 “Every University of Phoenix location in Florida is halting on-campus enrollment,” Miami Herald, Sept 28, 2017.24 VA GI Bill Comparison Tool, University of Phoenix-Bay Area, accessed Nov 4, 2017.25 VA GI Bill Comparison Tool, University of Phoenix-Boston, accessed Nov 4, 2017.26 VA GI Bill Comparison Tool, University of Phoenix-Arlington, VA, accessed Nov 4, 2017.27 VA GI Bill Comparison Tool, University of Phoenix-Boston, accessed Nov 4, 2017.28 Gainful Employment DMYR 2015 Final Rates, US Department of Education.29 Gainful Employment DMYR 2015 Final Rates, US Department of Education.30 College Scorecard profile for University of Phoenix, accessed Nov 4, 2017.31 GI Bill Comparison Tool data files, accessed Nov 4, 2017.32 VA GI Bill Comparison Tool, University of Phoenix-Boston, accessed Nov 4, 2017.33 “Willis Stein & Partners, Landmark Partners and Vision Capital Complete Innovative Transaction,” Media Release, Aug 29, 2012.34 Education Corporation of America purchases Kaplan College campuses, Media Release, Feb 12, 2015.35 What’s Up with ACICS Colleges?” Center for American Progress, Jun 6, 2017.36 Gainful Employment DMYR 2015 Final Rates, US Department of Education.
Endnotes
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Private EquityStakeholderProject
37 Based on median earnings of $25,081 for a Greensboro resident with a high school diploma, U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates. https://col-legescorecard.ed.gov/school/?480815-Virginia-College-Greensboro, accessed Nov 4, 2017.
38 https://collegescorecard.ed.gov/school/?480815-Virginia-College-Greensboro, accessed Nov 4, 2017. 39 Gainful Employment DMYR 2015 Final Rates, US Department of Education. “Over 800 Programs Fail Education Dept.’s Gainful-Employment Rule,” Chronicle of Higher Education, Jan 9,2017.
40 Based on median earnings of $25,175 for a Nashville resident with a high school diploma, U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates. https://col-legescorecard.ed.gov/school/?246202-Brightwood-College-Nashville, accessed Nov 4, 2017.
41 https://collegescorecard.ed.gov/school/?480815-Virginia-College-Greensboro, accessed Nov 4, 2017. 42 Gainful Employment DMYR 2015 Final Rates, US Department of Education.43 https://collegescorecard.ed.gov/school/?458681-Fortis-College-Indianapolis, accessed Oct 15, 2017.44 “Do Students of Color Profit from For-Profit College?” Center for Responsible Lending, Oct 2014.45 Leadership Conference on Civil and Human Rights, et al, “Gainful Employment: A Civil Rights Perspective,” October 2014, available at http://www.protectstudentsandtaxpayers.org/wp-con-tent/uploads/2014/10/Gainful-Employment-Civil-Rights-Perspective_WhitePaper_October2014.pdf.
46 Analysis of National Center for Education Statistics, “Integrated Postsecondary Education Data System,” available at https://nces.ed.gov/ipeds/datacenter (last accessed October 2016),examining 12-month 2014 enrollment by race/ethnicity.
47 “Different degrees of debt: Student borrowing in the for-profit, nonprofit, and public sectors,” Brookings Institution, June 2016.48 “Different degrees of debt: Student borrowing in the for-profit, nonprofit, and public sectors,” Brookings Institution, June 2016.49 “Different degrees of debt: Student borrowing in the for-profit, nonprofit, and public sectors,” Brookings Institution, June 2016.50 “For-profit college students twice as likely to default on loans, report says,” PBS News Hour, Oct 5, 2017.51 Apollo Investment Corp Form 2016 10K, May 18, 2017.52 http://www.deltaed.com/our-brands/, accessed Nov 4, 2017.53 https://collegescorecard.ed.gov/school/?460826-Miller-Motte-Technical-College-Augusta, accessed Nov 4, 2017.54 https://nces.ed.gov/collegenavigator/?q=Miller-motte&s=all&id=460826, accessed Nov 4, 2017.55 Briefing on FY 2014 Official National Default Rates, Sept 27, 2017.56 https://studentaid.ed.gov/sa/about/data-center/school/composite-scores57 Institutions on HCM1 or HCM2 as of 6-1-2017, US Dept of Education. 58 “Dept. Names More Than 550 Colleges It Has Put Under Extra Financial Scrutiny,” Chronicle of Higher Education, Mar 31, 2015.59 “Education Department Strips Authority of Largest For-Profit Accreditor,” US News & World Report, Sept. 22, 2016.60 https://www.vets.gov/gi-bill-comparison-tool, accessed Nov 3, 2017.61 What’s Up with ACICS Colleges?” Center for American Progress, Jun 6, 201762 “DeVos review identifies 102 financial interests with potential conflicts,” Politico, Jan 20, 2017.63 “DeVos Embrace Of Predatory For-Profit Colleges Is Breathtaking,” Huffington Post, Sep 07, 2017.64 “18 AGs sue Department of Education over Gainful Employment Rule,” CNN, Oct 18, 2017.65 Gainful Employment DMYR 2015 Final Rates, US Department of Education.66 “College Complaints Unmasked: 99 Percent of Student Fraud Claims Concern For-Profit Colleges,” The Century Foundation, Nov 8, 2017.67 “DeVos Tells CFPB to Back Off on Student Loans,” Bloomberg, Sept 8, 2017.68 “For-profit Bridgepoint Education forced to forgive $24 million in private student loans,” Washington Post, Sept 12, 2016.
Private Equity Stakeholder ProjectPRIVATE EQUITY’S FAILING GRADE
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